Wal-mart Vows Diversity, Wage Improvements

Retailer's Chief Outlines Changes At Annual Shareholders Meeting

June 5, 2004|By Maria Halkias, Dallas Morning News

FAYETTEVILLE, Ark. -- Wal-Mart Stores Inc. chief executive Lee Scott, whose company has been embroiled in lawsuits over gender bias and wage disputes, outlined plans Friday to make the world's largest retailer a better place to work.

Software programs will lock up registers if cashiers aren't relieved for lunch breaks. New job classifications and pay structures for U.S. hourly employees will raise wages for many. A newly created corporate compliance team of 40 people will oversee new policies and report back to management.

Scott, speaking to 18,000 shareholders and employees at the company's annual meeting in Bentonville, Ark., also pledged to cut the bonuses of top executives if diversity goals aren't met.

"We're going to benefit from the external criticism. When a company gets large, complacency can set in," Scott said. "But a benefit of being in the spotlight is that it makes you reach higher. Ultimately, we'll be a better company for it."

The changes will affect 1.3 million workers at the mammoth company. The retailer has more than 5,400 stores worldwide.

Labor unions accuse Wal-Mart of paying workers less than local prevailing wages.

The company's new compensation structure creates seven job classes with wages that reflect the market. Under the new structure workers may receive an increase of between 8 cents an hour to $3 an hour in June, Business Week magazine said in a preview of its June 14 issue, quoting unidentified employees and labor leaders,

Raises would be given based on a flat rate, not a percentage of salary, which may hurt long-term employees, Business Week reported.

The average full-time Wal-Mart associate is paid $9.64 an hour, in addition to contributions to 401(k) and profit-sharing plans, company spokesman Gus Whitcomb said. About 75 percent of the company's employees work full time, or at least 36 hours a week, he said.

The plan will raise expenses, which may hurt the low-cost advantage Wal-Mart has used to help push discounters such as Ames Department Stores Inc. and Bradlees Inc. into bankruptcy.

"It does sound like a pretty comprehensive program to address the problems that have been talked about for some time," said Jim Luke, according to Bloomberg News. Luke helps manage about $15 billion in assets, including Wal-Mart shares, at BB&T Asset Management in Raleigh, N.C. "It should result in better morale among the store personnel."